"Not so fast, Mr. President," responded Republicans, who still hold their grip on the House of Representatives.

The first test of whether the country's deep partisan divide can be narrowed comes immediately, as Democrats under Obama's leadership try to work out a compromise with Republicans to avoid what has been called the "fiscal cliff," a series of automatic tax increases and spending cuts totalling $800 billion next year alone that could push the slowly recovering U.S. economy back into recession.

Obama won despite leading the country through a period in which the economy suffered its biggest downturn since the 1930s Great Depression and stubbornly high unemployment dipped only slightly below eight per cent in the final months of the campaign.

Voters' rejection of Republican challenger Mitt Romney and his party's drift to the far right of the political spectrum will surely bring a deep reassessment of strategy. The Republican base -- dominated by diminishing numbers of white men -- is shrinking, while the country moves toward a day when minorities -- blacks, Hispanics and Asians -- become the majority. Obama's second-term victory was sealed by massive minority support.

Obama's re-election guarantees the full implementation of his signature legislative achievement, the overhaul of the nation's health-care system, which Republicans had vowed to overturn. Also likely to be a continued is U.S. foreign policy that depends on multinational partnerships in dealing with issues such as Syria's civil war and Iran's nuclear program, which Romney called a sign of American weakness. And China, facing its own leadership transition, should be relieved. Romney had pledged to declare it a currency manipulator, potentially leading to sanctions and escalating trade tensions.

But the "fiscal cliff" at the start of 2013 comes even before Obama's January inauguration. It includes big tax increases for nearly all Americans and deep spending cuts, including big reductions in spending for the military and popular social programs. It grew out of the government's inability a year ago to reach a deal on cutting the United States' skyrocketing budget deficit and more than $16-trillion debt. The automatic cuts and tax increases were put in place as Congress and the White House decided to push the problem past Tuesday's election.

As he spoke in Chicago after his victory, Obama said the work to come will "inevitably stir up passions."

"These arguments we have are a mark of our liberty," he said, putting a best face on what is expected to be a brutal ideological fight.

Republican House Speaker John Boehner reminded Americans his party still holds the cards with their majority in the lower chamber of Congress.

He said Wednesday he was open to raising government revenue, but it could not be done, as Obama wants, by raising taxes on high income earners. Instead, he said, tax rates should be lowered across the board, a move he said would stimulate economic growth while producing more tax revenue. That does not portend a compromise any time soon.

"Voters made clear there is no mandate for raising taxes. Obama has proposed higher taxes on households earning over $250,000 a year, and that is what killed attempts at compromise a year ago," Boehner said.

Setting up a continuing legislative gridlock, Democrats continue to control the Senate and can trump conservative legislation that originates in the House. As leader of the Senate minority, Republican Sen. Mitch McConnell signalled a readiness for continued obstruction if the Democrats and the president don't capitulate.

"The voters have not endorsed the failures or excesses of the president's first term," said McConnell, frosty in his post-election remarks. "Now it's time for the president to propose solutions that actually have a chance of passing the Republican-controlled House and deliver in a way that he did not in his first four years in office."

As Obama was declared the winner, thousands of supporters in his hometown of Chicago hugged each other, danced and pumped their fists. Excited crowds gathered in New York's Times Square and near the White House in Washington, with drivers joyfully honking as they passed.

But the celebration was not the overwhelming one of four years ago, when voters knew they were making history by electing the U.S.'s first black president.

Obama was also a far cry from the winner of four years ago, the improbably elected son of a white American mother and a Kenyan father who captivated the world with his message of hope and pledges of bipartisanship that would change the way things are done in Washington.

Those lofty ambitions quickly sank into the quagmire of the punishing economic recession.

Younger voters and minorities went to the polls Tuesday at levels not far off 2008 numbers. Hispanics made up 10 per cent of the electorate, up from nine per cent four years ago. Republicans won less than 30 per cent of the Hispanic vote and not even one in 10 votes among black Americans.

While many Republican leaders talked tough, others in the party spoke of needing to change their approach on issues including immigration.

Republicans have a "period of reflection and recalibration ahead," acknowledged Sen. John Cornyn, chairman of the National Republican Senatorial Committee.

Obama's narrow lead in the popular vote will make it difficult for the president to claim a sweeping mandate. With returns from 94 per cent of the nation's precincts, Obama had 50 per cent of the popular vote. Romney had 48 per cent.

Romney tried to set a more conciliatory tone on his way off the national stage.

"At a time like this, we can't risk partisan bickering," Romney said, after a campaign filled with it. "Our leaders have to reach across the aisle to do the people's work."

-- The Associated Press

The election is over... let the campaign begin

OK, it's still four years away, but that doesn't mean the 2016 presidential campaign in the U.S. isn't already underway. Here are the most likely contenders for the Democratic and Republican nominations:

Chris Christie: The idea some conservatives hold that the New Jersey governor's kind reception of President Barack Obama in the aftermath of hurricane Sandy led to Mitt Romney's loss is preposterous. If Christie can win re-election next year -- and that's a big if, given the possibility Newark's Democratic mayor and Twitter superhero Cory Booker might run -- he has a strong case to make for the GOP nomination.

Jeb Bush/Marco Rubio: It's hard to see both Florida Republicans running in 2016, since Bush has long been a political mentor to Rubio. Bush probably has the right of first refusal in the race, but our guess is he stays away and plays a leading role in helping Rubio. Rubio has a real opportunity to try to lead his party to its next stage by pushing for a reassessment of the GOP's relationship, or lack thereof, with Hispanics.

Paul Ryan: Ryan acquitted himself well in his brief time on the national ticket and raised his profile with donors and activists within the GOP. His announcement that he would return to the House in 2013 to chair the budget committee suggests Ryan will spend the next two years or so burnishing his reputation as the "ideas guy" within the GOP and, perhaps, as the most high-profile foil to Obama and his policies.

Hillary Rodham Clinton: The race for the Democratic nomination begins -- and could end -- with the decision of the soon-to-be former secretary of state. If she runs (she has said she is not interested), it's hard to imagine some of the people listed below making the contest.

Joe Biden: Just in case you had ruled out the possibility of Biden running in 2016 -- he will be 73 on election day -- Biden reminded you while voting Tuesday. Asked whether this was the last time he would cast a ballot for himself, the vice-president smiled and said, "No, I don't think so."

Andrew M. Cuomo: If Clinton and Biden stay out, the governor of New York starts the 2016 race as the front-runner. Cuomo has demonstrated an ability to raise lots and lots of money, he has a golden last name in American politics and he shepherded New York's same-sex marriage bill to passage in the legislature.

-- McClatchy News Services

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